Here’s a sign that whatever happens in the U.S. or overseas with climate-change gymnastics, big investors are taking the issue seriously.

RiskMetrics Group, the big risk-analysis firm, just snapped up KLD Research, which specializes in environmental, social, and governance issues for investors. That basically means that RiskMetrics’ traditional approach to figuring out what risks hang over companies—from exchange rates to commodity prices–will now include plenty of emphasis on environmental issues, including climate change.

The tie-up comes as many institutional investors are increasingly pressing big companies to be more forthright about their exposure to potential risks (and opportunities) from climate change. Witness the growth of Ceres.

And it comes just after the Securities and Exchange Commission made it easier for shareholders to ask companies about social and environmental risks—including climate change.

“We hadn’t done the environmental and climate-related factors before,” Knut Kjaer, president of RiskMetrics, told us. He said the acquisition, for an undisclosed sum, brings risk analysis one step closer to fulfulling the United Nations principles for “responsible investment,” which start by asking investors to consider social and environmental factors.

Peter Kinder, the president of KLD, sees the deal as confirmation of the trend for big companies to increasingly watch their environmental back, as it were. For example, coal-heavy power companies such as Duke Energy and American Electric Power “are looking closely at their carbon and environmental footprint—something they simply weren’t doing even three years ago,” he said.

Comments (2 of 2)

RiskMetrics acquistion of Innovest in early 2009 should have provided the company with excellent environmental information as well as carbon analysis. I had assumed the acquisition of KLD had more to do with the index licensing revenue than the research itself.

3:40 pm November 3, 2009

Kit Stolz wrote :

Can you mention some opportunities that could come out of global warming for companies? (Besides investing in efficiency, I mean.) Thank you.

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Environmental Capital provides daily news and analysis of the shifting energy and environmental landscape. The Wall Street Journal’s Keith Johnson is the lead writer. Environmental Capital is led by Journal energy reporter Russell Gold, and includes contributions from other writers at the Journal, WSJ.com, and Dow Jones Newswires. Write us at environmentalcapital@wsj.com.